Battle continues over stalled Kushner, KABR project in Jersey City

July 2, 2018

City Hall in Jersey City

By Joshua Burd

The public feud between the Kushner Cos. and Jersey City Mayor Steven Fulop continued late last week, as lawyers for the developer threatened additional litigation on top of a lawsuit over a long-delayed, high-profile project in Journal Square.

The battle began last Wednesday when the firm filed a lawsuit in federal court alleging that the city is seeking to derail One Journal Square, a proposal calling for more than 1,500 apartments, because of the Kushner family’s connection to President Trump. Jared Kushner, the firm’s former CEO, is Trump’s son-in-law and adviser.

Fulop, a Democrat, blasted back on Twitter throughout the week, calling the suit “nonsense” and alleging the Kushners “illegally try to use the presidency to make money,” which prompted a cease and desist letter from the firm’s attorney.

“I got another letter from the Kushner family today threatening to sue me AGAIN,” Fulop tweeted on Friday. “They demand an apology for me saying the truth + they even drafted a tweet for me to send out. It’s not going to happen. I’ll revise my tweet slightly when THEY apologize publicly (maybe).

2/2. I’m not going to apologize for saying the truth. Whether it’s inaccurately reporting ownership in properties, or misrepresenting $ partners, or outright saying in China that $ in Jersey City properties means lots to the family, i think the public can judge 4 themselves

The letter from the attorney, Joseph Fiorenzo of Sills Cummis & Gross PC, and Fulop’s tweet were the latest volleys in the fight over One Journal Square. The city and its redevelopment agency in mid-April issued a letter saying the firm and its partner, KABR Group, had defaulted on their obligations under a redevelopment agreement because they had missed a payment and a construction deadline for the estimated $900 million project.

In an interview last month with The Real Deal, Charlie Kushner, company patriarch and Jared’s father, lashed out at Fulop and said Jersey City was “pandering to the Trump haters and connected us to the Trump haters.” Kushner said he was considering legal action, which came Wednesday in a nine-count complaint filed in Newark federal court, as first reported by The Jersey Journal.

“The issuance of the Notice of Default was motivated solely by political animus towards Plaintiffs due to the fact that one of the principal investors in (the joint venture) is the Kushner Companies LLC, which was formerly run by Jared Kushner, currently a senior advisor to President Donald J. Trump,” the complaint reads. “The Notice of Default was issued to appease and curry favor with the overwhelmingly anti-Trump constituents of Jersey City.”

The two-tower, mixed-use project has been in the works since before April 2015, when Kushner and KABR entered into a redeveloper agreement with the Jersey City Redevelopment Agency. Plans call for two 56-story residential towers with a combined 1,512 residential units, along with 96,000 square feet of retail space, 118,000 square feet of commercial space, a landscaped plaza and parking, all of it adjacent to the Journal Square PATH station.

Fulop, who is named as a defendant in the lawsuit, had publicly supported the project in 2014 when the developers acquired the parcel. The lawsuit says the mayor and other city officials also privately supported the joint venture’s plans to seek a tax abatement, as contemplated by the redevelopment agreement.

But Fulop began to back away in early 2017, once Trump had taken office, and held up the joint venture’s application for the tax abatement until after Fulop was re-elected last November, according to the complaint. The suit alleges that Fulop said One Journal Square would get back on track if the Kushners left the deal and a new partner was brought in, giving way to several tweets and other public expressions of opposition to the project.

The complaint, which asks a judge to throw out the city’s notice of default, also blames Fulop for the delays to the project’s construction schedule. The developers have already spent some $55 million in application and development costs, the complaint says.

Fulop reportedly emailed media outlets on Thursday saying, “It’s not like the Kushners have a great deal of credibility in anything they say.”

“Their entire lawsuit is hearsay nonsense,” he wrote, according to The Jersey Journal. “Bottom line — the same way they illegally use the presidency to make money is the same way here they try to use the presidency to be pretend victims. They will do anything to manipulate a situation.”

Joshua Burd, an award-winning reporter and editor, has been covering New Jersey commercial real estate for eight years. Many industry leaders view him as the go-to real estate reporter in the state, a role he is eager to continue as the editor of Real Estate NJ. He is a lifelong New Jersey resident who has spent a decade covering the great Garden State.